The Senate on Wednesday threw its weight behind the Nigerian Financial Intelligence Unit, NFIU, over its new guidelines it issued concerning withdrawals from the accounts of local governments in the country.
The NFIU had in a circular to banks and other stakeholders, pegged the daily cash withdrawal from accounts of local governments at N500,000 only. Transactions above the pegged amount are to be carried out through normal cheque procedure or electronic transfer.
The agency also threatened to deal with any bank that allowed debit transaction on the accounts before funds hit the accounts.
Senate’s endorsement came after Senator Sabi Abdulahi’s motion was adopted during plenary, with the lawmakers resolving to urge all financial institutions to support the implementation of the new guidelines with diligence and professionalism.
The lawmakers further called on the Federal Government to “urgently fund the operations of the new NFIU so that it can work to earn the confidence and trust of Nigerians and its international partners.”
The resolution also called on all the 36 state governments and the Federal Capital Territory Administration to fully support the implementation of the new NFIU guidelines to promote good governance at the local government areas and restore governance at the grass roots levels.
President of the Senate, Bukola Saraki, who presided over the session, also urged the Senate committees on States and Local Government Affairs and Financial Crimes and Anti-Corruption to monitor the implementation of the resolutions.
While moving the motion, Abdullahi said: “The Senate notes that the NFIU has issued new financial guidelines on the operations of the local government accounts titled, ‘Guidelines to reduce vulnerabilities created by cash withdrawals from LG funds throughout Nigeria effective 1st June, 2019.’
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“The development and issuance of the new guidelines is prompted by threats by international financial watchdogs to sanction Nigeria because of financial abuse. Due to lack of autonomous status for the NFIU before and the alleged interference with its operations by the Economic and Financial Crimes Commission, the Egmont Group had suspended Nigeria’s membership of the body in February 2017.
“The Federal Government is alarmed by the continuous pillage of cash allocated to local councils across the states by state government through the State Joint Local Government Accounts, and the stark reality of poor governance at the grass roots by the third tier of government, and its attendant role in the challenges of poverty, unemployment, rural banditry, kidnapping and other social vices.”
Abdullahi noted that the guidelines stated that the joint account system in place in most states would only exist for the receipt of allocations but not disbursement. “Specifically the guidelines provide that the State Joint Local Government Account is only a collection account of funds to be shared to only local government accounts in accordance with Section 162 (7) of the constitution and not for any other transactions or purpose,” he stated.
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